There are a lot of reasons why a Kentucky resident would choose Chapter 13 bankruptcy over Chapter 7 bankruptcy. However, some may question what the advantages are, especially considering that a Chapter 13 repayment plan could represent a three to five year commitment. This article will discuss the primary benefits of Chapter 13 bankruptcy in detail.
The biggest benefit of Chapter 13 bankruptcy is the way it can help Kentucky residents stop a home foreclosure. This style of bankruptcy allows filers to stop their foreclosure proceedings, save their home, and even cure their late mortgage payments over time. Still, new mortgage payments that come up during the Chapter 13 proceedings must be paid on time during the bankruptcy.
Another awesome benefit of Chapter 13 proceedings is the fact that filers are able to reschedule their secured debts, and allow them to be paid over the period of the Chapter 13 payment schedule. This can give debtors the kind of financial breathing room they need to resolve their debts with lower payments spread out over a longer period of time.
Additionally, Chapter 13 bankruptcy proceedings act like a type of consolidation loan service, allowing debtors to pay off the money they owe without having to be in direct contact with their creditors. The process also protects filers from being continually harassed by the creditors to whom they owe money.
Kentucky residents who are considering filing for Chapter 13 bankruptcy may wish to consult with an experienced lawyer who can advise them as to whether Chapter 13 is right for them, or if another style of bankruptcy or debt resolution strategy would be more appropriate.
Source: U.S. Courts, “Bankruptcy Basics,” accessed March 18, 2016